What endorsement is required on each insurance policy obtained by a Pump It Up franchisee?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
Each insurance policy you obtain shall be specifically endorsed to provide that the coverage shall be primary and that any insurance carried by any additional insured shall be excess and non-contributory. At least 10 days prior to commencing construction of the Franchised Business or 3 days before taking ownership of an existing open Pump It Up Franchised Business, and annually thereafter, you must submit to us a copy of all of your Certificates of Insurance or other evidence that you are maintaining this insurance coverage and paying premiums. If you obtain claims-made insurance policies, you must obtain tail coverage for at least four years after the end of any policy period in question or as otherwise set forth in your Franchise Agreement, the Manuals, or provided to you in writing. If you fail or refuse to obtain and maintain the insurance we specify, in addition to our other remedies, we may obtain such insurance for you and the Franchised Business. If we obtain insurance for you due to your failure or refusal to obtain or maintain the required insurance, or your failure or refusal to provide us with adequate evidence of holding such required insurance, you must cooperate with us and reimburse us for all premiums, costs and expenses we incur in obtaining and maintaining the insurance, plus a reasonable fee for our time incurred in obtaining such insurance.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 25–29)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, each insurance policy obtained by a franchisee must be specifically endorsed to provide that the coverage shall be primary and that any insurance carried by any additional insured shall be excess and non-contributory. This means that in the event of a claim, the franchisee's insurance policy will be the first one to pay out, before any other insurance policies that might cover the same incident.
This requirement protects Pump It Up (as an additional insured) by ensuring that the franchisee's insurance is the primary source of coverage. If Pump It Up also has its own insurance, it would only be used after the franchisee's policy limits are exhausted. This arrangement minimizes the franchisor's risk and potential financial exposure from incidents occurring at the franchised location.
Furthermore, the franchisee must provide proof of insurance coverage to Pump It Up. Specifically, at least 10 days prior to commencing construction of the Franchised Business or 3 days before taking ownership of an existing open Pump It Up Franchised Business, and annually thereafter, the franchisee must submit to Pump It Up a copy of all Certificates of Insurance or other evidence that they are maintaining this insurance coverage and paying premiums. If the franchisee fails to maintain the insurance as specified by Pump It Up, Pump It Up has the right to obtain insurance coverage on behalf of the franchisee, and the franchisee is responsible for reimbursing all premiums, costs, and expenses incurred by Pump It Up, including a reasonable fee for their time.